Commodity prices are hitting new highs almost every day. There seems to be no limit to where prices can go. Well, get ready: the big fall is coming soon.
In the current turmoil, there has been a rush into commodities. The volume of funds escaping risky assets and their derivatives has been enough to cause bubble-like euphoria in commodity prices. With global equity market capitalisation almost 10 times the notional value of commodity derivatives, the rush to commodities by investors has been like squeezing a quart into a pint pot.